Case Studies & Best Practices for Sub-Branding or Folding an Acquired Company Into a Parent Brand

Two brands that have adopted the branded house approach to brand strategy are Virgin Group and Uber Technologies Inc. Virgin is projected as the best-known branded house company globally with over 200 extensions or sub-brands thriving under the Virgin name. Two brands that have adopted the hybrid approach to brand strategy are Swiss Life and The Coca-Cola Company.

Branded House Companies

Virgin

  • According to Fabrik Brands, “Virgin is by far one of the best-known branded house companies in the world.” Mark Truelson tagged Virgin as a quintessentially British brand.
  • The company has over 200 extensions or sub-brands thriving under the Virgin name. Some sub-brands include Virgin Money, Virgin Mobile, Virgin Active, Virgin Atlantic, and Virgin Trains brands.
  • Branson developed the Virgin Group by targeting verticals where he felt things were not as effective or appealing as they should be. In other words, he entered the business environment to make the world a better place by providing services where there is customer discontent.
  • Virgin uses its familiar name as a signpost for consumer trust, followed by an additional product or service title.
  • Its unique approach to brand extension allows it to hold forth its services without losing customer loyalty or visibility. This strategy positions the brand as one of the best-known brands in the world.
  • What makes the Virgin brand so special is that it maintains it’s memorable personality, regardless of where the brand goes.
  • All sub-brands within the Virgin framework draws from a single identity.
  • This means that the organization never needs to start from scratch when exploring a new product’s benefits. Every new and improved offering taps into more than 40 years of brand identity, cultivated through excellent customer service and careful attention to detail.
  • Each new sub-brand under the Virgin portfolio is driven by a singular set of brand values, ensuring that customers’ experience is consistent. According to the company, its purpose is to change business for good.
  • The company’s values help keep its customers, products, and partners on the right path to achieve its purpose while providing incredible experiences.
  • Virgin’s customers know that the company thinks outside of the box, so when a Virgin initiative does not go entirely as planned, the brand and its followers are more inclined to wave it off.
  • A pictorial representation of some sub-brands within the Virgin family is provided below.
Virgin Brands

Uber

  • According to LinkedIn, B12, and Medium, Uber is one of the companies leveraging the branded house approach for its branding strategy.
  • Uber operates five sub-segments under the Uber umbrella, including Uber Ride, Uber Drive, Uber Eat, Uber for Business, and Uber Freight. Two additional sub-brands operated by the company are Uber Health and Uber Health and Uber Elevate.

Uber Brand Logos

  • The company builds trust and equity into its brand through a simplified architecture focused on consistency and efficiency.
  • Its mission of igniting opportunity by setting the world in motion is brought to fulfillment in its goal, connecting consumers to service providers through powering movement from point A to point B.
  • The company opined that it wants people worldwide to feel like Uber was born in their city, so a conventional brand system will not work. Also, building a globally recognizable brand requires common elements people can associate with.
  • The result of this is a brand mark with a strong idea at the core, the bit and atom, and execution and visual language with the flexibility to take the business in a new direction while connecting with the many local markets around the world.
  • It also resulted in a clean, fresh look that translates well in any medium or locale.
  • The clean visual break from Uber’s previous brand identity broke ties with its previous toxic culture perception, pushing the company forward into a new era.
  • The reaction to Uber’s rebrand has been generally positive. Respected design sites like UnderConsideration note the brand’s success at distancing itself from the status quo.

Hybrid Brands

Coca-Cola

Coca-Cola hybrid brand strategySource

  • Notwithstanding, the company still maintains its multiple individual product brands such as Sprite, Dasani, and Fanta.
  • The idea behind this move by Coca-Cola was to change how customers think about the coke identity.
  • The “One Brand” approach was designed to transform and share Coca-Cola’s trademark equity across the entire product portfolio so that the business could take advantage of its differentiated position on the market.
  • Rather than presenting itself as a company that offered many products, Coca-Cola decided that it was time to build an identity as a business that serves many customers.
  • Before the sub-brands unification, five out of 10 people did not know Coca-Cola Zero was a no-calorie and sugar-free drink. The unification brought the opportunity to educate consumers about the breadth of beverages offered.
  • According to the company, the hybrid brand system was aimed at;
  • The hybrid brand approach has favored the company. It communicated the range of offerings better and clarified consumer choices among the Coca-Cola family of beverages while keeping the other products separate.
  • The one brand strategy paved the way for greater synergy by bundling a range of products together while opening the door for greater market penetration.
  • Coca-Cola’s new “branded house” strategy created value to consumers by simplifying the many brand promises to just one. “Choose Happiness” simplified the consumer’s choice: Coca-Cola.
  • The strategy also created value for Coca-Cola by driving higher penetration through trial and higher incidence of consumption for each of the four sub-brands, which increased the overall share of occasion and share of the market and bundled the overall marketing spend around just one brand, which creates greater share-of-voice.
  • The biggest change was introducing the iconic red coloring across the product packaging, which gave Coca-Cola drinks a greater impact on shelves.

Swiss Life

  • Swiss Life projects itself as an organization that uses the hybrid system of branding.
  • The brand identity is a key instrument in making the Swiss Life brand personality tangible for internal and external target groups and distinguishing it from the competition.
  • The company manages some sub-brands under the Swiss Life umbrella, including Swiss Life Asset Managers, Swiss Life Banque Privee, Swiss Life Global Solutions, and Swiss Life Select.
  • Furthermore, the company manages other stand-alone brands such as Tecis, HorBach, Proventus, Chase de Vere.
  • It also manages Mayfair Capital Investment Management Ltd., which was incorporated into the Swiss Life Asset Managers brand.

SwissLife Hybrid brand

Sub Branding/Folding Acquired Company — Overview

  • Analysis of multiple industry reports, news publications, and articles by experts reveals no better approach between sub-branding an acquired brand or folding it into the parent brand.
  • While some sources, such as Marketing Week and Harvard Business School, suggest that an acquired brand should work towards retaining its brand image, other sources, including Ideas Big, Hinge marketing, opined that an acquired company should be folded into the parent organization.
  • Other sources such as Willow Marketing, Brand-Rep, Digital Doughnut, and an article on LinkedIn remained neutral about which approach should be adopted. Instead, they pointed out that different businesses should adopt the approach that is best suited for their business model and consumer profile and further provided the considerations that should be factored in before choosing a brand strategy post-acquisition.
  • Before choosing a brand strategy for a particular business type, some factors to be considered include the target audience, market dynamics, resources, visibility, reputation, and customers’ needs and wants.
  • The above factors are to be determined through targeted research and a well-defined strategy.
  • Below, we have analyzed two major best practices recommended by industry experts and trusted analytics sources while adopting the best brand strategy for a business.

Best Practices

1. Cultural Alignment

  • According to McKinsey, Forbes, and Fabrik Brands, tackle the culture conundrum is a major factor to consider when deciding the best brand strategy to adopt for a company post-transition period following a merger.
  • In this context, culture entails a company’s management practices, the day-to-day working norms of how it gets work done, such as whether decisions are made via consensus or by the most senior executives.
  • When not properly addressed, cultural integration challenges can often lead to frustration among employees, reducing productivity, and increasing the risk that key talent will depart, hampering the integration’s success.
  • Companies often struggle to assess and manage culture and organizational compatibility because managers focus on the wrong things. Too often, they revert to rites, rituals, language, norms, and artifacts—addressing the most visible expressions of culture rather than the underlying management practices and working norms.
  • An example is shown in the integration of two European industrial companies, managers identified and evaluated ten potential cultural goals as joint areas for improvement, joint areas of strength, or areas of difference.
  • The managers weighed these potential goals against the value sources in the deal, deciding to focus on four closely linked to this value and those that struck a balance between areas where the two companies were similar and where they were different.
  • Quickly achieving the benefits of their similarities created the momentum and trust required for addressing many of the thornier issues the managers faced.
  • To ensure that cultural integration would be linked to and led by the businesses, not just by human resources, the company assigned a senior-executive sponsor from each business to tackle each goal.
  • Every sponsor then created and implemented a plan that managers could monitor well past the close date and into ongoing operations—including specific, consistent metrics, such as achieving a certain score on an ongoing employee survey.

2. Communication (With Customers and Employees)

  • According to EY, Forbes, Franke Fiorella, and Fabrik Brands, one of the best practices to consider while trying to decide which brand approach to select post-transition period is to ensure effective communication for employees and the target audience.
  • Fabrik Brands opined that whether engaging in a merger or evolving an existing brand, it is important to clearly-defined the company’s message for its target audience. Building a strong user persona for the brand is a great way to get started.
  • Also, to maintain strength during the months preceding an acquisition, clear, frequent communication with all employees within both organizations is essential.
  • This will ensure a smooth and successful transition.
  • An example is seen in Dixons and Carphone Warehouse. The companies adopted a dual-brand approach to marketing after their merger in 2014. The deal was described as a “collaboration of equals” at the time, which showed the similar attitudes of the two companies.
  • By fusing their brand voices through shared values and personalities, Dixons Carphone launched a strong and successful new technology company.
  • Other recommended best practices include early preparations, adequate leadership and resources, post-acquisition integration team, integration action plan, and leadership team evaluation.
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